NAIROBI (Reuters) – Kenya’s shilling is overvalued by about 5 to 10 percent to the dollar but demand for imports and other market pressures are likely to weaken it gradually so no policy change is required, the IMF said.

The shilling has lost 1.7 percent since the start of 2015 against the dollar, after a 4.5 percent fall in 2014 that was largely blamed on a downturn in the vital tourism industry after a number of militant attacks.

It was trading at 91.85/92.05 to the dollar on Thursday.

“We did an assessment a few months ago and we found there was an excess of valuation around 5 and 10 percent at that time,” said Armando Morales, the International Monetary Fund’s representative in Kenya.

A new evaluation was needed “but at this point it is probably going to be around the same levels,” he told Reuters in an interview late on Wednesday.

To keep Kenya competitive, the shilling needed to be in the upper 90s to the dollar, Morales said. “People should not get worried if the exchange rate depreciates gradually,” he said.

But he said there was no need for the government to adjust policy because the expanding economy would drive up imports and demand for dollars, putting pressure on the shilling. The IMF expects the economy to grow 6.9 percent this year.

Kenya secured a one-year renewable deal with the IMF last year for a $688 million precautionary credit arrangement to help with any future shocks, although the government has said it does not plan to use such a loan.

Kenya’s access to the facility, normally only offered to more developed emerging markets, highlighted its economic “track record” and developed financial market, Morales said, although he said the central bank needed to be vigilant about rising demand for credit and foreign exchange.

Kenya is expected to appoint a new central bank governor in coming weeks, after Njuguna Ndung’u term ended in March. His deputy, Haron Sirima, is now acting governor and was tipped in a Reuters poll to become the next bank chief.

Morales said he was confident the transition would be smooth but a swift appointment of a new chief would be advisable.

“Although the market is not reacting badly it is always better to have an announcement made relatively soon so people don’t think there are other considerations coming into place,” he said.